WD Completes Divestiture of Some HGST 3.5-Inch HDD Assets to Toshiba

Western Digital Corp. has completed its divestiture of certain 3.5-inch hard drive assets to Toshiba Corporation, as required by regulatory agencies that conditionally approved the company’s completed acquisition of Viviti Technologies Ltd. (formerly Hitachi Global Storage Technologies).

The assets will enable Toshiba to manufacture and sell 3.5-inch hard drives for the desktop and consumer electronics markets and will enhance its ability to manufacture and sell 3.5-inch hard drives for near-line (business critical) applications.

As part of its deal with Toshiba, WD also completed its purchase of Toshiba Storage Device (Thailand) Company Limited (TSDT), which manufactured hard drives prior to the recent Thailand flooding. The principal assets of TSDT are its Thailand property, facilities and employees, which WD plans to integrate into its Thailand operations.

The financial terms of the two agreements were not disclosed.

Comments

Following the recommendations of the several regulatory bodies in China, Europe, USA, Australia, etc. to try to avoid the monopoly of Seagate and WD in 3.5-inch desktop HDDs, the deal between WD and Toshiba is done.

WD acquired the Toshiba Storage Device (Thailand) Co., Ltd's manufacturing facility in Pathumtani, Thailand, devastated by the flood and comprising around 4,000 workers, and will probably transfer it into its own plants in the country in Bangpa In or Navanakorn.

More precisely, concerning the transfer of the 3.5-inch desktop activity and related IP, sixteen production lines of Hitachi GST - not WD - will be transfer to Toshiba, according to Matt Rutledge, VP and GM for WD client storage products. They are assembling drives of the latest technology: 1TB per platter, and from one to three disks. Before the complete move, WD will transfer this production to Toshiba.

Consequently three manufacturers, Seagate (with Samsung), Toshiba and WD will compete in the field, and not only two.

Toshiba said that, having completed this reinforcement of its HDD operations, it aims to double sales in the business to ¥800 billion in fiscal year 2014. Going forward, the Japanese company will consolidate its production at two manufacturing facilities in the Philippines and a contract manufacturer in China with TDK and its partner SAE.